Glencore Using Market Knowledge to Launch New Investment Fund

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It would appear investor appetite for commodity funds knows no end. Glencore, one of the world’s largest commodity traders and 35% owner of Anglo-Swiss Xstrata and 14% owner of the merged aluminum assets of Rusal, Sual and Glencore is arguably in a privileged position to understand the demand and price drivers of the commodities markets better than anyone else.  Certainly that is what Credit Suisse is hoping as they jointly launch the Glencore Active Index Strategy fund based on an index of 20 commodity prices including metals, oil and agricultural products according to an article in the Financial Times. The traders will vote each month on the prospects for the commodities, ranking them on a scale of one to five. Credit Suisse will manage investor funds in line with the index, translating the votes into allocations.

Credit Suisse is quoted as saying clients would not be able to see the allocations until six weeks after they had been made because Glencore does not want its views on raw materials prices to leak into the market and effect its positions. Interest is said to be high and the bank is hoping for investment flows in excess of $1bn. Pension funds such as Calpers are said to be looking at returning to the metals sector after an absence of a year, this kind of fund would probably appeal to them based on the credentials of partners if nothing else.

Now wouldn’t we like to get a look at those predictions!

–Stuart Burns

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